Bank of America directors lose support from shareholders

David Henry, Ross Kerber

3 Min Read

NEW YORK (Reuters) - Four Bank of America Corp (BAC.N) directors on the board’s governance committee received unusually small majorities of votes for re-election at this week’s annual meeting, according to tallies the company released on Thursday.

A Bank of America sign is shown on a building in downtown Los Angeles, California January 15, 2014. REUTERS/Mike Blake

None received more than 71.9 percent of the votes cast, compared with each last year receiving at least 98 percent.

Shareholder advisory firm Institutional Shareholder Services had recommended voting against the four directors after their committee advised the board in October to unilaterally change company bylaws to allow Chief Executive Brian Moynihan to also be named chairman.

The relatively low votes for the four directors contrasted with strong shows of support for other directors and for the board’s positions on other issues at the meeting. Moynihan was re-elected with 93.9 percent and 95.9 percent of voters sided with the board in opposing a call for a study of breaking up the bank, the second biggest U.S.-based lender.

The board had made a last-minute attempt to ease discontent over the October action, which had reversed a move during the financial crisis to have separate people be CEO and chairman. On Monday the company promised to hold another shareholder vote on the issue no later than next year’s meeting.

The board’s action in October was seen by insiders then as evidence that Moynihan had won more influence with directors.

Thomas May, the head of the governance committee, received 66.7 percent of votes cast. Advisory firm Glass Lewis & Co had recommended that May alone not be re-elected to the board because of bylaw change. The three other committee members, Sharon Allen, Frank Bramble and Lionel Nowell received, respectively, 71.9, 71.7 and 71.8 percent of votes.

Similar shareholder dissatisfaction has led to changes on boards of other banks. At JPMorgan Chase & Co (JPM.N) two directors who were on the board’s risk committee left in 2013 after winning narrow majorities of votes for re-election following the company’s London Whale trading debacle.

Bank of America spokesman Lawrence Grayson declined to comment.

Jonathan Macey, a Yale Law School professor specializing in corporate governance, said the results will put pressure on governance committee members. “For any director, especially for someone who is head of a committee, you need to have the confidence of the shareholder base,” Macey said.

Bank of America shareholders, Macey said, “clearly don’t like the way the company is governed, but there’s a strong endorsement of the CEO.”

Reporting by David Henry in New York and Ross Kerber in Boston; Editing by Christian Plumb